Significance of Obama’s Visit to Kenya

After six years of a long wait, the US President and “son of Kenya” is “coming back home” on July 24th 2015. When he was sworn in as the 44th President of the United States of America on 20th January 2009, every Kenyan went into jubilation with high expectations of increased economic ties between the US and Kenya. Whether their expectations were met is a discussion for another day; but Barrack Obama is jetting into Kenya this month for the Global Entrepreneurship Summit to be hosted in Nairobi.

This is not the first time Obama is coming to Kenya. He visited Kenya in 1988 and later on in 2006 as the Senator for Illinois.

However, this is the most significant visit he is making to Kenya; probably for his entire lifetime and for Kenya too. On a broad perspective, it is his first time to visit Kenya in his capacity as the US president and most likely his last as the president. This coupled with the fact that he is the first sitting US president to jet into Kenya makes his visit a kind of “maiden visit” by the white house to the country. For Kenya, it is the combination of receiving the most powerful man on earth into their country and the economic significance of the visit that counts more.

Global Entrepreneurship Summit brings together investors and entrepreneurs from all over the world to share ideas and innovations that spur economic opportunities. Launched by president Obama in 2009, the summit was hosted for the first time in Africa by Morocco in 2014. Kenya becomes the first sub-Saharan country to host the summit and second in Africa after Morocco.

Hosting such an international summit and considering the high level caliber of participants attending therefore makes it a huge economic opportunity for Kenya.

Negative perceptions

Following frequent terror attacks by Al-Shabaab on Kenya in the recent past, the country’s attractiveness to foreign investors had started declining. Travel advisories issued by the western countries including the US made the situation worse by instilling fear on foreigners who were seeking opportunities in the country. Tourism sector in Kenya accounts for about 12% of the GDP and with the terror scare, the sector has been on a downward trend in the recent past.

Moreover, after the current government in Kenya came into power in 2013, the US seemed to distance itself from it, since both the president and his deputy were ICC indictees. The president and his deputy were charged with facilitating the post-election violence that happened in Kenya in 2007/2008. By telling Kenyans that “choices have consequences”, the US president seemed to pass a message that economic ties between the two countries would be strained henceforth.

Opportunity to right the wrong

It is on this background that Obama’s visit to Kenya is now being viewed as a correction of the above two major negative perceptions which are detrimental to Kenya’s economic growth.

First, by the country hosting the GES, it sends a very strong message to the rest of the world that Kenya is the next frontier market and it can host such international forums peacefully. Obama’s personal physical presence in the country for the summit is a reassurance to foreign investors and tourists that indeed Kenya is safe for investment and tourism. In addition, the Kenyan government has put in concerted efforts to utilize this rare opportunity to showcase the best of Kenya and demystify any negative perceptions.

Second, Obama’s visit is a sign of rekindling relationships between the US and Kenya and a trust in the current government. This is a plus for the country since it is meant to boost investor confidence and result in more collaborative deals between Kenyan companies and international investors. The summit itself is a hub for such deals and Kenyan institutions are warming up to the investors already in town and those expected to arrive in the course of the week.

Never mind the fact that business around Nairobi will be slowed down during Obama’s visit, but the long-term economic benefits to be reaped out-weigh the few days’ costs. It is however up to the Kenyan government to take advantage of this opportunity and sell Kenya to the world for the few hours global media will be focused on the country.

Nouriel Roubini, a.k.a. “Doctor Doom”, is chairman of Roubini Global Economics and professor of economics at New York University’s Stern School of Business. Roubini has been consistently cited as one of the world’s top global thinkers. This year, he was voted as the most influential economist in the world by Forbes magazine.

Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum

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